1 Ability to set more realistic budgets 2 Better identification of resource needs 3 Linking of costs to outputs 4 Clearer linking of costs with staff responsibilities 5 Identification of budgetary slack. 14.8 Responsibility accounting is a system that measures the plans (by budgets) and actions by actual results) of each responsibility centre. 14.9 The choice of a responsibility centre type guides the variables to be included in the budgeting exercise. For example, if a revenue centre is chosen, the focus will be on variables that assist in forecasting revenue. Factors related to, say, costs of the investment base will only be considered if they assist in forecasting revenue. 14.10 Exhibit 14.7 in Chapter 14 summarises key points. Examples are
